My company owed taxes for many years, An accountant asked me to ignore it and register a new one. Is it a right thing to do?

Question

I started my company in 2002. Due to lack of funding, I didn't make enough to cover the expenses.

In 2007, I sold a small portion of my company and got some funding. Then I left US to set up business in another country leaving my "partner" to take care of US side of business. Before I left, I asked him pay the back taxes and new taxes every year on time. He promised he would.

Two years ago, I bought him out for many issues. Before we signed the dissolution agreement, I made sure the he filed and paid all the taxes each year. He scanned the filings to me to prove he filed and paid. I believed and signed him out.

Now I came back to the US, and found none of the year tax was paid. Unexpectedly he filed dissolution of my company in 2007. Now the taxes, penalties and interests owed from 2002-2013 is stressful.

I was advised by an accountant to forget about this company and do not pay any tax, do nothing but register a new company to continue business with. This sounds odd to me. Won't this impact my credit, my company credit, record and reputation? Won't IRS chase this back taxes? Please advise.

Answer 1

I think the first step is to get an accountant whose advice you believe. Your accountant is far better placed to advise you on what sounds like a fairly complicated, fairly high stakes corporate arrangement than the internet.

I would go back to the accountant and get him to explain in writing what his specific advice is. If you still don't like it absolutely get a second opinion. You may also want to speak to a lawyer.